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Janet Yellen and the Federal Reserve have released their statement for the July 29 to 30 FOMC meeting. As expected, we got more tapering of the monthly bond buying and we had no formal change in interest rates. Keep in mind that the headline GDP of 4.0% for the second quarter was closer to 2.3% if you use the inflation component, and the number may have been altered by revisions to the first quarter's drop.

The tapering came in at another $10 billion to a new $25 billion per month in bond buying. This brings the rate down to $15 billion per month in Treasury securities purchases and $10 billion per month in mortgage-backed securities purchases.

The biggest news here is that the Fed admitted that the inflation has moved closer to its long-term targets again. Still, the statement signals that a range of labor market indicators show a significant underutilization of labor resources. In short, that jobs recovery is quantity rather than quality.

The FOMC statement also signals that a highly accommodative stance of monetary policy remains appropriate. Another signal is that interest rates will stay at the current range for a considerable time after the bond purchases wind down to an end.

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Two different FOMC quotes from the statement said,

"The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat. The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions."

"When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

Wednesday's vote was 9 to 1, with Charles Plosser being the dissenting vote. He objected to the "considerable time" guidance because he thought it did not reflect the considerable economic progress that has been made to date.